Technology diligence

Definition

The check on whether the software a business runs on transfers with it.

Why It Matters

Specialist firms sell this as its own report beside a quality of earnings, scoped anywhere from a two-page red-flag review to a full assessment of architecture, security and the people who maintain it. On a Main Street deal the useful version is narrower and nobody sells it: list every system the business could not run a week without, then ask who the license belongs to, what it costs, and whether it moves on a change of ownership. A booking or dispatch account in the seller's own name is the ordinary finding, and it is cheap to fix before closing and expensive to discover after.

In numbers: A dispatch system at $340 a month is $4,080 a year of cost that comes with the business, and the $1,200 the vendor charges to move the account is the cheap half of finding out after closing.